What is Universal Credit?
Universal Credit (UC) is a means-tested benefit for people of working age with a low income.
If you are over the age of 18 but under the qualifying age for pension credit (around aged 60 – 65, depending on when you were born) you will be able to claim UC.
In certain circumstances, 16 and 17 year olds will be able to claim UC.
Means testing involves assessing your capital. Capital generally means one off payments or lump sums that you don’t get regularly. Savings and some types of property are capital.
Any property or land that you own counts as capital, but some types are disregarded including the home which you normally live in.
There are specific rules on when other property (for example, a second home) can be disregarded as capital in cases involving relationship breakdown, essential repairs to the property and damage to the property.
The rules are complicated and you should seek advice.
If your capital is more than £16,000 you can’t get UC. This applies to both single and joint claimants.
UC, administered by Jobcentre Plus, will replace the following benefits:
- Employment and Support Allowance (income related)
- Jobseekers Allowance (income related)
- Child Tax Credit
- Working Tax Credit
- Income Support
- Housing Benefit
UC will also replace budgeting loans.
Budgeting loans were previously administered by the Social Fund for people who had been receiving means tested benefits for at least 26 weeks (for example income related Employment and Support Allowance, income related Jobseekers Allowance, Pension Credit or Income Support).
They were previously awarded for essential expenses such as furniture, clothing and footwear.
UC payments are not taxable and will be paid monthly instead of fortnightly.
DLA and PIP are not affected by Universal Credit.
When will Universal Credit be introduced?
The government is are gradually rolling out UC to replace all the means tested benefits mentioned above. At the moment a single person living anywhere in England, Wales and Scotland who is making a new claim for a means tested benefit (but not Employment and Support Allowance) may have to apply for UC. Couples and families living in certain areas, who are applying for a means tested benefit (but not Employment and Support Allowance) for the first time may also have to apply for UC.
The roll out of UC is slower than initially anticipated and it is now expected that all remaining claimants currently receiving the affected benefits will be transferred from that benefit to UC from July 2019.
What is the Universal Credit Claimant Commitment?
When claiming or transferring to UC some people will be invited to an interview with a Jobcentre Plus adviser to sign a claimant commitment.
The claimant commitment is a document which sets out what you should do to prepare for and look for work.
If you are already working and would have, for example, made a previous claim for income support, this interview will set out how you should find a better paid job or more hours.
The details in the claimant commitment are known as ‘work related requirements’.
The work related requirements in your claimant commitment will depend on which work related group you are in. There are a number of different work related groups.
There is a work related group known as the ‘no work related requirements group’.
If you have limited capability for work-related activity, which can apply if you are disabled, you should be placed into the ‘no work related requirements group’. This means that you will not have to prepare for or find work.
For example, if you are currently receiving Employment and Support Allowance and have been deemed to have ‘limited capability for work related activity’ you should be transferred into the ‘no work related requirements group’ of UC when the time comes.
There are other work related groups which focus on preparing for work, finding work or staying in work.
Universal Credit: How much will I receive?
UC is made up of different ‘elements’ (payments). The standard element is:
Single claimant under 25: £251.77 per month
Single claimant over 25: £317.82 per month
Couple, both under 25: £395.20 per month
Couple, either over 25: £489.89 per month
In addition to the standard element you may also be entitled to other elements such as help with housing costs which would previously have been paid through housing benefit.
The elements include:
- Child element for each child
- Disabled child element for each disabled child
- Housing costs
- Limited capability for work
- Limited capability for work related activity
- Childcare cost
Your Jobcentre Plus office or local Citizens Advice Bureau can advise you on which elements you may be entitled to depending on your circumstances.
Universal Credit and the Benefits Cap
Universal credit is subject to the benefits cap. For more information contact the Information and Advice Service, contact details of which are given below.
Problems with Universal Credit
If the Jobcentre Plus office has made a mistake or you are not happy with their decision, seek advice.
There are many ways to challenge Jobcentre Plus decisions and you should seek advice as soon as you receive a decision you are unhappy with. There are often short deadlines for appealing.
For help and advice, contact the Sense Information and Advice Service.
First published: Thursday 16 January 2014
Updated: Friday 9 December 2016